The US Securities and Exchange Commission (SEC) announced on Monday that it had filed insider trading charges against a former US Representative for Indiana’s 4th Congressional District.
According to the press release, the charges were brought against Stephen Buyer, who allegedly committed insider trading related to stocks after leaving Congress in 2011 and later formed a consulting firm that provided services to companies like T-Mobile.
Case Background
As a result of a golf outing he attended with a T-Mobile executive in March 2018, Buyer learned that the company was planning to acquire Sprint at that time, but the plan was not publicly known. The next day, Buyer began purchasing Sprint shares, and he acquired a total of $568,000 of Sprint common stock in his own personal accounts, a joint account with his cousin, and an acquaintance’s account before the merger announcement.
Over $107,000 in profit was immediately realized after news of the merger leaked in April 2018. Buyer purchased more than $1 million of Navigant Consulting, Inc. securities before Guidehouse LLP, another of Buyer’s consulting clients, announced it would acquire Navigant.
Using several accounts, Buyer spread his purchases across his own, joint accounts with his wife, son and wife’s own account, as well as an acquaintance’s account that was involved in Sprint’s trading. According to the complaint, Buyer sold nearly all of the shares he had acquired across the various accounts on the day Navigant announced its acquisition and profited more than $227,000.
“When insiders like Buyer, an attorney, a former prosecutor, and a retired Congressman, monetize their access to material, nonpublic information, as alleged in this case, they not only violate the federal securities laws but also undermine public trust and confidence in the fairness of our markets. We are committed to doing all we can to maintain and enhance public trust by levelling the playing field and holding Buyer accountable for illegally profiting from his access,” Gurbir S. Grewal, the Director of the SEC Enforcement Division, commented.
